Change in Profit sharing ratio

Pushkraj Sathe (Chartered Accountant) (203 Points)

25 September 2008  

Where a partner reduces his share in the firm from say 50% to 40% then whether the partner will be liable to capital gains tax in respect of his individual assessment in respect of the 10% transferred  ( suppose if his share is transferred to the  existing partner).  If yes please state the relevant section.What are the implications of such a transaction from the point of view of any or all acts in India.